EXHIBIT 99
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THE FIRST AMERICAN CORPORATION REPORTS
OPERATING RESULTS FOR THE SECOND QUARTER 2001
-- First American Title Insurance Company Gains Market Share in 2000 --
SANTA ANA, Calif., Aug. 1, 2001 - The First American Corporation (NYSE: FAF),
the nation's leading, diversified provider of business information and related
products and services, announced today operating results for the second quarter
ended June 30, 2001. The company also reported that, based on recently released
American Land Title Association market share statistics for the year 2000, its
largest subsidiary, First American Title Insurance Company, increased its
national market share from 21.5 percent in 1999 to 22.9 percent in 2000.
Net income for the second quarter of 2001 was $54.5 million, or 75 cents
per diluted share. This compares with 2000 second quarter net income of $25.0
million, or 38 cents per diluted share. Revenues for the second quarter of 2001
were $928.0 million, a 20 percent increase when compared with revenues of $775.9
million for the same period last year.
Net income for the first six months of 2001 was $75.4 million, or $1.03 per
diluted share, which excludes a $3.6 million pretax charge to earnings, or 3
cents per diluted share, in the first quarter of 2001 relating to the company's
exit of the lender-placed homeowner's insurance business, which was part of the
National Information Group acquisition completed in May 1999. This compares with
net income of $26.0 million, or 40 cents per diluted share, for the first six
months of 2000. Revenues for the first half of 2001 totaled $1.69 billion, an
increase of 19 percent when compared with revenues of $1.42 billion for the
first half of 2000.
Lower interest rates, robust home sales and near record refinance activity
provided revenue and profit increases versus comparable periods of the prior
year.
"We are extremely pleased with our second quarter results," stated Parker
S. Kennedy, president of The First American Corporation. "While processing and
closing record order counts in our title insurance and real estate information
services segments, we were able to exercise solid expense controls and, thus,
significantly improve our margins when compared with the first quarter of 2001
and the prior year second quarter.
"There is continued strength in the resale housing markets as evidenced by
a 6 percent increase in open orders in our title operations for the second
quarter versus the first quarter of
2001. However, we have experienced a slight softening in total orders since June
as the refinance market has declined from its near record levels."
Kennedy continued, "Our consumer information and services segment, which
provides a complete suite of information products for the automotive,
employment, insurance and investment industries, should continue to grow and
yield higher margins as a result of strategic acquisitions, market share
expansion and national cross-selling programs."
The First American Corporation, based in Santa Ana, Calif., is the nation's
leading, diversified provider of business information and related products and
services. The corporation's three primary business segments include: title
information and services; real estate information and services, which includes
mortgage information services and database information and services; and
consumer information and services, which provides automotive, subprime and
direct-to-consumer credit reporting; direct-to-consumer public records
reporting; resident screening; pre-employment screening; automobile title
administration; property and automotive insurance tracking services; property
and casualty insurance; home warranties; investment advisory; and trust and
banking services. Information about the company and an archive of its press
releases can be found on the Internet at www.firstam.com.
Certain statements made in this press release, including those relating to
the expansion of, and higher margin yields within, the company's consumer
information and services segment are forward-looking. Risks and
uncertainties exist which may cause results to differ materially from those
set forth in these forward-looking statements. Factors that could cause the
anticipated results to differ from those described in the forward-looking
statements include: interest rate fluctuations; changes in the performance
of the real estate markets; general volatility in the capital markets;
changes in applicable government regulations; consolidation among the
company's significant customers and competitors; legal proceedings
commenced by the California attorney general and related litigation; the
company's continued ability to identify businesses to be acquired; changes
in the company's ability to integrate businesses which it acquires; and
other factors described in the company's Annual Report on Form 10-K for the
year ended Dec. 31, 2000, filed with the Securities and Exchange
Commission. The forward-looking statements speak only as of the date they
are made. The company does not undertake to update forward-looking
statements to reflect circumstances or events that occur after the date the
forward-looking statements are made.
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The First American Corporation
Summary of Earnings
For the Three Months Ended June 30 For the Six Months Ended June 30
---------------------------------- --------------------------------
2001 2000 2001 2000
---- ---- ---- ----
Revenues $ 928,042,000 $ 775,925,000 $ 1,694,783,000 $1,422,099,000
Income before income taxes and
minority interests $ 106,332,000 $ 48,346,000 $ 145,530,000 $ 52,231,000
Income taxes $ 39,200,000 $ 19,400,000 $ 52,700,000 $ 20,200,000
Minority interests $ 12,615,000 $ 3,914,000 $ 19,537,000 $ 5,997,000
Net income $ 54,517,000 $ 25,032,000 $ 73,293,000 $ 26,034,000
Net income per share:
Basic $0.83 $0.39 $1.13 $0.41
Diluted $0.75* $0.38 $1.00* $0.40
Weighted average shares outstanding:
Basic 65,621,000 63,403,000 64,893,000 63,771,000
Diluted 74,960,000* 65,682,000 75,167,000* 65,508,000
*Includes the effects of the 4.5 percent senior convertible debentures issued in
April 2001, as well as other convertible debt.
The First American Corporation
Summary Balance Sheet Information
June 30, 2001 December 30, 2000
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Total assets $ 2,627,323,000 $ 2,199,737,000
Total equity $ 1,017,182,000 $ 870,237,000
Book value per share $15.06 $13.62
(Additional Financial Data to Follow)
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Selected Financial Data
(Unaudited)
For the Three Months Ended For the Six Months Ended
June 30 June 30
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2001 2000 2001 2000
---- ---- ---- ----
RESULTS OF OPERATIONS
Revenues
Operating revenues $ 908,009,000 $ 760,216,000 $ 1,658,193,000 $ 1,396,081,000
Investment and other income 20,033,000 15,709,000 36,590,000 26,018,000
--------------- --------------- --------------- ---------------
928,042,000 775,925,000 1,694,783,000 1,422,099,000
--------------- --------------- --------------- ---------------
Expenses
Salaries and other personnel costs 311,396,000 263,059,000 586,215,000 513,263,000
Premiums retained by agents 216,415,000 225,473,000 405,822,000 392,595,000
Other operating expenses 214,431,000 168,789,000 405,519,000 335,149,000
Provision for title losses and other claims 40,525,000 37,440,000 77,015,000 67,563,000
Depreciation and amortization 25,672,000 20,906,000 50,105,000 38,322,000
Premium taxes 5,704,000 5,634,000 10,712,000 10,922,000
Interest 7,567,000 6,278,000 13,865,000 12,054,000
--------------- --------------- --------------- ---------------
821,710,000 727,579,000 1,549,253,000 1,369,868,000
--------------- --------------- --------------- ---------------
Income before income taxes and minority interests $ 106,332,000 $ 48,346,000 $ 145,530,000 $ 52,231,000
=============== =============== =============== ===============
OPERATING REVENUES
Title Insurance:
Direct operations $ 386,102,000 $ 283,487,000 $ 675,373,000 $ 519,433,000
Agency operations 267,183,000 275,227,000 501,437,000 485,827,000
--------------- --------------- --------------- ---------------
653,285,000 558,714,000 1,176,810,000 1,005,260,000
Real Estate Information 184,461,000 137,893,000 346,694,000 266,650,000
Consumer Information 70,263,000 63,609,000 134,689,000 124,171,000
--------------- --------------- --------------- ---------------
Total operating revenues $ 908,009,000 $ 760,216,000 $ 1,658,193,000 $ 1,396,081,000
=============== =============== =============== ===============
INCOME BEFORE INCOME TAXES AND
MINORITY INTERESTS
Title Insurance $ 62,504,000 $ 36,957,000 $ 82,181,000 $ 43,209,000
Real Estate Information 48,672,000 13,251,000 76,186,000 16,115,000
Consumer Information 9,559,000 8,935,000 13,536,000 18,529,000
--------------- --------------- --------------- ---------------
Total before corporate expenses and
minority interests 120,735,000 59,143,000 171,903,000 77,853,000
Corporate expenses 14,403,000 10,797,000 26,373,000 25,622,000
--------------- --------------- --------------- ---------------
Income before income taxes and minority interests $ 106,332,000 $ 48,346,000 $ 145,530,000 $ 52,231,000
=============== =============== =============== ===============
TITLE INSURANCE ORDER COUNTS FROM DIRECT OPERATIONS
Title orders opened 462,700 328,300 897,400 639,500
Title orders closed 360,000 260,900 630,100 491,200
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